North Sea salaries expected to rise 15% due to skills gap

Saturday 12 January 2013

MANY North Sea workers will enjoy a pay boost in the coming year as skills shortages intensify, an Aberdeen-based recruitment website says in its annual review of the sector.

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Tim Sharp and Ian McConnell

Malcolm Webb, chief executive of trade body Oil & Gas UK, last night agreed with the view there will be upward pressure on pay rates with the Aberdeen labour market " quite tight".

Kevin Forbes, chief executive of recruitment website Oilandgaspeople.com, said: "Our forecast shows that with increased investment in North Sea oil, demand for qualified staff is set to reach an all-time high, which will exacerbate an already serious skills shortage, a problem that is being further exacerbated as UK candidates head abroad to earn even higher wages with a huge demand for qualified expatriates globally."

The Aberdeen recruitment site, which says it deals with more than 4000 companies, highlights the impact of the latest licensing round in October, during which the Government awarded 167 new licences on 330 North Sea blocks. It also cites recent announcements of major investments in the North Sea.Mr Forbes said: "From our own industry knowledge we expect more big announcements in 2013. North Sea oil is in decline – there is no denying that. We have peaked in terms of how much oil and gas we have in the ground. But we have got a lot of extended-life projects which means platforms in the North Sea are now able to produce long past what the sell-by date is."He added that labour-intensive decommissioning work is also driving demand for workers. Meanwhile, global demand for skilled workers is rising as activity increases in areas such as Canada, Australia and Brazil.Mr Forbes expects to see more demand for a range of roles from engineers and drill crew to geoscientists and exploration engineers.The average wage in the sector is now £64,000, and Mr Forbes said this will rise.He noted, of those employed directly in the oil industry, around 60% are contract workers who will simply work for the highest-paying firms. With day rates starting at £200 for a basic skilled worker and rising to £1000 for top roles, he predicted that companies face having to increase the pay they offer by 15% this year.Mr Webb said: "The market in Aberdeen is quite tight at the moment. I can see there will be pressure on rates."He added: "These are all the benefits of success. Here we have an industry, unlike - others in the UK, [in which] we are actively looking for people to come and do these jobs we have got, which is pretty good for the economy as a whole."

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North Sea salaries expected to rise 15% due to skills gap

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